On 8 April 2021, Haitong International Securities Group Limited (“Haitong International”) and China-U.K. Climate and Environmental Information Disclosure Pilot Working Group (“the Pilot Working Group”) jointly released the “Chinese Financial Institutions’ Route to Achieving Carbon Neutrality” report (“The Report”), which is the first of its kind to provide guidelines for Chinese financial institutions to reduce carbon emission.
In 2020, Haitong International has joined the “China-U.K. Climate and Environmental Information Disclosure Pilot Working Group” as the only Chinese IB member in the initiative. The Pilot Working Group was established in 2017 by the China Society for Finance and Banking and City of London’s Green Finance Initiative. In view of the agreement by the Chinese and U.K. governments in strengthening the cooperation in the green finance space and encouraging financial institutions of the two nations to pilot climate and environmental information disclosure, the Pilot Working Group was founded to serve as an important platform to facilitate discussions and information exchange between the Chinese and U.K. financial institutions
The Report found that among the 121 financial institutions of the 2020 Fortune Global 500 companies, 30 of them have achieved carbon neutrality in its business operations. However, none of the Chinese financial institutions has achieved or committed to a carbon neutrality goal yet.
With China announcing its commitment to “peak emissions before 2030 and achieve carbon neutrality before 2060”, Haitong International and the Pilot Working Group jointly conducted a research to outline the steps for Chinese financial institutions to achieve carbon neutrality. The Report aims to serve as a guide for the entities to reduce carbon emissions, and assist the Chinese financial institutions to swiftly commence their carbon neutrality plans.
The Report suggested that the Chinese financial institutions can achieve carbon neutrality through three stages — Carbon Accounting, Carbon Reduction and Carbon Offset. It also outlined concrete implementation procedures based on the stages.
The Report also appealed the Chinese financial institutions to achieve Asset Carbon Neutrality through actively expanding their green finance businesses, in order to reduce carbon footprints in investment and financing activities. This can also accelerate the low-carbon development of other sectors. For example, securities houses or investment banks can facilitate green/carbon reduction related financing through underwriting green bonds for energy, industrial, construction and public utilities corporations etc. Asset management firms can also introduce carbon funds, or green and low-carbon themed equity and bond funds etc.
